Many retailers offer gift cards, which may be received by a user and then redeemed for goods, services, or both at a later time. Gift cards are popular as gifts and often exchanged between people during holidays, birthdays, or other occasions. People may also purchase gift cards for their own use or may receive them during a promotion.
Gift card transactions at a merchant location usually involve a redemption process that is fully integrated with a point of sale (POS) system. When processing gift cards, these merchants often use the same hardware (credit card reader, cash register, etc.) that is used to process other types of payment types (e.g., credit cards, debit cards, etc.). The merchants also typically have direct access to gift card balances and other information associated with gift cards because of the integration with the POS system. Unfortunately, integration with a POS system can be complex, and thus a restriction to implementation of a gift card program by a low volume or unsophisticated merchant.
Merchants often strive to improve customer loyalty and attract and retain new customers. By offering gift cards, a merchant may experience increases in customer loyalty and acquisition of new customers.